TaxTMI 
TaxTMI 
TaxTMI 
2024 (2) TMI 633
X X X X Extracts X X X X
X X X X Extracts X X X X
....who did not have jurisdiction over the assessee in view of monetary threshold limit laid down vide CBDT Instruction No.1/2011 [F. NO. 187/12/2010-IT(A-D] dated 31.01.2011 read together with instruction no. 6/2011 dated 08.04.2011, therefore, the assessment order passed by non- jurisdictional income tax authority may kindly be held to be illegal, bad in law and the entire proceedings may kindly be quashed and consequential addition of Rs. 29,25,000/- made to the total income may kindly be directed to be deleted. 2. On the facts and in the circumstances of the case, the assessment order passed by the Learned ACIT-3(1), Raipur u/s 147 r.w.s. 143(3) is bad in law inasmuch as the assessment ought to have been framed under Section 153C of the Income Tax Act, 1961 inasmuch as Section 153C overrides the provisions of Section 147 and 148, hence, the assessment order passed u/s 147 r.w.s. 143(3) is bad in law, illegal and void ab initio. Hence it is prayed that the assessment order passed u/s 147 r.w.s. 143(3) may kindly be declared as illegal, bad in law and consequential enhancement of Rs. 29,25,000/- made to the total income may kindly be directed to be deleted. 3. On the facts and in....
X X X X Extracts X X X X
X X X X Extracts X X X X
....during the year under consideration, which were not recorded by him in his books of accounts. Accordingly, the A.O. held the aforesaid amount of Rs. 29.25 lacs as the assessee's deemed income u/s.69 of the Act. Accordingly, the A.O. vide his order passed u/s. 147 r.w.s. 143(3) of the Act, dated 28.10.2016 assessed the income of the assessee at Rs. 28,35,614/-. 4. Aggrieved the assessee carried the matter in appeal before the CIT(Appeals) but without success. 5. The assessee, being aggrieved with the order of the CIT(Appeals), has carried the matter in appeal before me. 6. At the threshold of hearing of the appeal, it was submitted by the Ld. Authorized Representative (for short 'AR') for the assessee that the A.O, i.e., ACIT, Circle-3(1), Raipur, had wrongly assumed jurisdiction and framed the impugned assessment in the case of the assessee. Elaborating on his aforesaid contention, it was averred by the Ld. AR that as the assessee had e-filed his return of income on 16.02.2010, declaring an income of Rs. Nil, therefore, the ACIT, Circle-3(1), Raipur had wrongly assumed jurisdiction and framed the assessment vide his order passed u/s.147 r.w.s. 143(3) dated 28.10.2016. Carrying h....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ore, on the similar lines, the assessment framed in the present case being devoid and bereft of any valid assumption of jurisdiction by the A.O was liable to be quashed and would meet the same fate. 7. Per contra, the Ld. Departmental Representative (for short, 'DR') relied on the orders of the lower authorities. The Ld. DR drew my attention to the written submissions that were filed by the A.O, i.e., DCIT-1(1), Raipur, on the aforesaid issue on the basis of which the impugned order has been assailed before me. For the sake of clarity, the "written submissions" dated 18.12.2023 of the A.O are culled out as follows: "1. Issue No-1 regarding Jurisdiction a) Consequent upon Search & Seizure Operation in the case of Sharma Group and Others, the DCIT (Central Circle), Raipur vide his letter dated 27/11/2014 had shared an information to DCIT, Circle-1(1), Raipur and it had been requested to initiate action u/s 147/153C. b) In the mean time during 2014-15 there was Restructuring in the Department consequent to which two new offices of Addl.CIT/JCIT, Range-3 and Range-4 were created by splitting erstwhile Range-1 and Range-2, Raipur. Territorial jurisdiction of few areas were transfe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ing the jurisdiction of the Assessing Officer, if he does not do so within 30 days of receipt of notice under section 142(1). (b) In the present case, the facts did not warrant the order made by the High Court. At the same time, this Court notices that the High Court had granted liberty to the Reliance is placed on the following judgements: (i) In the case of Raymond Woolen Mills Vs. ITO & Others, Hon'ble SC held that "in determining whether commencement of reassessment proceedings was valid it has only to be seen whether there was prima facie some material oft the basis of which the department could reopen the case. The sufficiency or correctness of the material is not a thing to be considered at this stage." [1999] 236 ITR 34 (SC)/[1999] 152 CTR 418 (SC)] (ii) In the case of Yogendra Kumar Gupta Vs. ITO, Hon'ble SC held that "Where subsequent to completion of original assessment, Assessing Officer, on basis of search carried out in case of another person, came to know that loan transactions of assessee with a finance company were bogus as said company was engaged in providing accommodation entries, it being a fresh information, he was justified in initiating reasses....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ived by the AO of the searched person, the AO of the other person would be rendered powerless to assess true income under S. 153C. In contrast. Section 147 can be invoked by the AO of an Assessee independently, on arriving at satisfaction of escapement of income for a given assessment year, regardless of 'satisfaction' of AO of searched person. Thus, it is self-evident that two sections operate quite differently. There is any statutory compulsion to resort only to mode prescribed under S. 153A/S.153C in the event of search. The scheme of Act does not suggest that mere search action revealing materials against the person other than searched person, would automatically oust the power of the AO over the assessee concerned under S. 147 of the Act. The overriding provisions of S. 153C merely enables the AO to set aside the pending reassessment proceedings and grants primacy to Section 153C of the Act. The exercise of power under S. 1 53C is governed without any stringent fetters of holding 'reason to believe' contemplated under S. 147. Therefore, while exercise of overriding power under S. 153C will render S. 147 otiose, the converse case of clipping the powers available....
X X X X Extracts X X X X
X X X X Extracts X X X X
....truction No.6/2011 (supra) remains the same as had been looked into at length by the "SMC" of the ITAT, Raipur, in assessee's own case for the immediately succeeding year, i.e. A.Y,.2010-11, ITA No. 214/RPR/2023 dated 16.10.2023, wherein the Tribunal had held as under: "8. I have heard the Ld. authorized representatives of both parties, perused the orders of the lower authorities as well as the material available on record, as well as considered the judicial pronouncements that have been pressed into service by them to drive home their respective contentions. 9. I have thoughtfully considered the aforesaid issues and shall first deal with the contention of the Ld. A.R that the A.O, i.e., ACIT, Circle-3(1), Raipur, had wrongly assumed jurisdiction and framed the assessment u/s. 147 r.w.s. 143(3) of the Act dated 28.10.2016. 10. As stated by the Ld. AR and, rightly so, I find that the multi-facet issues pertaining to the assumption of jurisdiction by an A.O. in light of the pecuniary/monetary limits contemplated in CBDT Instruction No.1/2011 (supra) r.w. CBDT Instruction No.6/2011 (supra) had been looked into at length by the "Division bench" of the ITAT, Raipur, in the case of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....abad, Mumbai and Pune. The above instructions are issued in supersession of the earlier instructions and shall be applicable with effect from 1-4-2011." (emphasis supplied by us) As stated by the Ld. AR, and, rightly so, the CBDT vide its aforesaid Instruction No.1/2011, dated 31.01.2011 had, inter alia, revised the earlier existing monetary limit for assigning the cases to ITOs/ACs/DCs w.e.f. 01.04.2011. On the basis of the aforesaid CBDT Instruction No.1/2011 (supra) w.e.f 01.04.2011, the case of a non-corporate assessee located in a mofussil area having declared an income above Rs. 15 lacs in his return of income is to be assigned to the ACs/DCs. As the case of the present assessee for the A.Y.2012-13 was selected for scrutiny assessment vide notice issued u/s. 143(2), dated 24.09.2015, therefore, the aforesaid CBDT Instruction No.1/2011, dated 31.01.2011 that was applicable w.e.f. 01.04.2011 duly applied to his case. Also, as per the areas earmarked in the aforesaid Instruction No.1/2011, dated 31.01.2011 as the assessee is not located in any of those cities/stations which have been held to be metro cities, therefore, his case would be as that of a non-corporate assessee ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... during the year under consideration had no pecuniary jurisdiction over the assessee's case was bad in the eyes of law. Considering the aforesaid lapse in the assumption of jurisdiction the Hon'ble High Court had quashed the notice that was issued by the ITO u/s.148 of the Act. Also, a similar view had been taken by the Hon'ble High Court of Gujarat in the case of Pankajbhai Jaysukhlal Shah Vs. ACIT, Circle-2 (2019) 110 taxmann.com 51 (Guj.). In the said case, though the A.O who had jurisdiction over the case of the assessee had recorded the 'reasons to believe' but notice u/s.148 of the Act was issued by another officer, therefore, the notice so issued u/s.148 of the Act was quashed by the Hon'ble High Court. At this stage, we may herein observe, that the aforesaid order of the Hon'ble High Court had thereafter, been upheld by the Hon'ble Supreme Court in the case of ACIT, Circle-1 Vs. Pankajbhai Jaysukhlal Shah[2020] 120 taxmann.com 318 (SC). Also, we find that the similar view had been taken by this Tribunal in its recent order passed in the case of Shri Sudhir Kumar Agrawal, Durg Vs. ITO, Ward-2(2), Bhilai in ITA No.158/RPR/2017 dated 17.10.2022, wherein dealing with the multi-....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ch he was served with the notice(s) u/ss.143(2) and 142(1), dated 03.03.2015, therefore, it was not permissible for him to challenge the same for the first time in the course of the proceeding before the tribunal. Having given a thoughtful consideration to the aforesaid claim of the ld. DR we are unable to persuade ourselves to subscribe to the same. On a careful perusal of Section 124 of the Act, it transpires that the same deals with the issue of "territorial jurisdiction" of an Assessing Officer. Ostensibly, sub-section (1) of Section 124 contemplates vesting with the A.O jurisdiction over a specified area by virtue of any direction or order issued under sub-section (1) and sub-section (2) of Section 120 of the Act. On the other hand sub-section (2) of Section 124 contemplates the manner in which any controversy as regards the territorial jurisdiction of an A.O is to be resolved. Apropos, sub- section (3) of Section 124 of the Act, the same places an embargo upon an assessee to call in question the jurisdiction of the A.O where he had initially not raised such objection within a period of one month from the date on which he was served with a notice under sub-section (1) of Secti....
X X X X Extracts X X X X
X X X X Extracts X X X X
....isdiction assumed by the Income-Tax Officer, Ward-2(2), Bhilai is by no means an objection to his territorial jurisdiction, but in fact an objection to the assumption of jurisdiction by him in contravention of the CBDT Instruction No.1/2011, dated 31.01.2011, therefore, the provisions of sub- section (3) of Section 124 would not assist the case of the revenue. 15. We shall now deal with the contention of the Ld. DR that as both the officers in question i.e. Dy. CIT, Circle-1, Bhilaiand the Income Tax Officer, Ward-2(2), Bhilai as per sub-section (5) of Section 120 were vested with concurrent jurisdiction over the assessee, therefore, initiation of the assessment proceedings by the Dy. CIT, Circle-1, Bhilai vide notice issued u/s.143(2) dated 24.09.2013, which thereafter had culminated into an assessment framed by the Income-Tax Officer, Ward-2(2), Bhilai vide his order passed u/s.143(3), dated 30.03.2015 does not suffer from any infirmity. In our considered view the aforesaid contention of the Ld. DR is absolutely misplaced and in fact devoid and bereft of any merit. As the aforesaid CBDT Instruction No.1/2011, dated 31.01.2011 exclusively vests the pecuniary jurisdiction over th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ew that now when in the present case the assessment proceedings were initiated by the Dy. CIT, Circle- 1, Bhilai vide notice u/s.143(2), dated 24.09.2013, which thereafter were taken up and culminated by the Income-Tax Officer, Ward-2(2), Bhilai vide his order passed u/s.143(3) dated 30.03.2015, then, as per the mandate of sub-section (1) of Section 127 of the Act, the specified authority i.e. Commissioner or above was obligated to have recorded his reasons for transferring the case from the aforesaid Dy. CIT, Circle-1, Bhilai to the Income-Tax Officer, Ward-2(2), Bhilai. However, nothing has been brought to our notice which would justify the transfer of jurisdiction over the assessee's case from the Dy. CIT, Circle-1, Bhilai to Income-Tax Officer, Ward-2(2), Bhilai. 16. Be that as it may, we are of the considered view that as in the case of the assessee the assessment order u/s.143(3), dated 30.03.2015 had been passed by a non-jurisdictional officer i.e. the Income-Tax Officer, Ward-2(2), Bhilai, which is in clear contravention of the CBDT Instruction No.1/2011 dated 31.01.2011, therefore, the same cannot be sustained and is liable to be struck down on the said count itself. Bef....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... had considered the matter and is of the opinion that the existing limits need to be revised to remove the abovementioned hardship. An increase in the monetary limits is also considered desirable in view of the increase in the scale of trade and industry since 2001, when the present income limits were introduced. It has therefore been decided to increase the monetary limits as under: Income Declared (Mofussil areas) Income Declared (Metro cities) ITOs ACs/DCs ITOs DCs/ACs Corporate returns Upto Rs. 20 lacs Above Rs. 30 lacs Upto Rs. 30 lacs Above Rs. 30 Lacs Non-corporate returns Upto Rs. 15 lacs Above Rs. 15 lacs Upto Rs. 20 lacs Above Rs. 20 lacs Metro charges for the purpose of above instructions shall be Ahmedabad, Bangalore, Chennai, Delhi, Kolkata, Hyderabad, Mumbai and Pune. The above instructions are issued in supersession of the earlier instructions and shall be applicable with effect from 1-4-2011. 6. Now, in this case, the assessment has been framed by the ACIT. At this stage, it will be appropriate to refer to the provisions of section 127 of the Act as under: Power to transfer cases (1) The [Principal Director General or] Director Gene....
X X X X Extracts X X X X
X X X X Extracts X X X X
....3(3), Kolkata, stating that he has no jurisdiction over the assessee. Thereafter on 31/07/2015, the DCIT, Circle-11(1), Kolkata, had issued notice u/s 142(1) of the Act to the assessee. The DCIT, Circle-11(1), Kolkata, completed assessment u/s 143(3) of the Act on 14/03/2016. The issue is whether an assessment order passed by DCIT, Circle-11(1), Kolkata, is valid as admittedly, he did not issue a notice u/s 143(2) of the Act, to the assessee. This issue is no more res-integra. This Bench of the Tribunal in the case of Soma Roy vs. ACIT in ITA No. 462/Kol/2019; Assessment Year 2015- 16, order dt. 8th January, 2020, under identical circumstances, held as under:- "5. After hearing rival contentions, I admit this additional ground as it is a legal ground, raising a jurisdictional issue and does not require any investigation into the facts. The ld. Counsel for the assessee submitted that as per Board Instruction No. 1/2011 [F. No. 187/12/2010-IT(A-I)], dt. 31/01/2011, the jurisdiction of the assessee is with the Assistant Commissioner of Income Tax, Circle- 1, Durgapur, as the assessee is a non- corporate assessee and the income returned is above Rs. 15,00,000/- and whereas, the statu....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on to conduct assessment if it is above Rs 15 lakhs. Above Rs. 15 lacs income declared by a non- corporate person i.e. like assessee, the pecuniary jurisdiction lies before AC/DC. In this case, admittedly, the assessee an individual (non corporate person) who undisputedly declared income of Rs. 50,28,040/- in his return of income cannot be assessed by the ITO as per the CBDT circular (supra). From a perusal of the assessment order, it reveals that the statutory notice u/s. 143(2) of the Act was issued by the then ITO, Ward-1, Haldia on 06.09.2013 and the same was served on the assessee on 19.09.2013 as noted by the AO. The AO noted that since the returned income is more than Rs. 15 lacs the case was transferred from the ITO, Ward-1, Haldia to ACIT, Circle-27 and the same was received by the office of the ACIT, Circle-27, Haldia on 24.09.2014 and immediately ACIT issued notice u/s. 142(1) of the Act on the same day. From the aforesaid facts the following facts emerged: i) The assessee had filed return of income declaring Rs. 50,28,040/-. The ITO issued notice under section 143(2) of the Act on 06.09.2013. ii) The ITO, Ward-1, Haldia taking note that the income returned was above....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n the result, appeal of assessee is allowed." Apart from that, we find that a similar view had been taken by the ITAT, Cuttack Bench, Cuttack in the case of Kshirod Kumar Pattanaik Vs. ITO, Angul Ward, Angul, ITA No.380/CTK/2019 dated 10.12.2020. 17. Consequent to our aforesaid deliberations, we are of the considered view that as in the present case before us the assessment had been framed by the Income Tax Officer, Ward-2(2), Bhilai u/s. 143(3), dated 30.03.2015 in clear contravention of the CBDT Instruction No.1/2011, dated 31.01.2011, which divested him of his jurisdiction over the case of the assessee for the year under consideration i.e. AY 2012-13, therefore, the same cannot be sustained and is liable to be struck down in terms of our aforesaid observations. We, thus, in terms of our aforesaid observations quash the order passed by the Income-Tax Officer, Ward-2(2), Bhilai for want of jurisdiction on his part." 17. On the basis of our aforesaid observations, we are of the considered view that as in the case of the present assessee before us the impugned assessment had been framed by the ITO-1(1), Bhilai vide his order passed u/s.143(3) dated 29.12.2016 on the basis of a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r vide CIT-1, Raipur Notification No. 1/2014-15, dated 15/11/2014 and subsequent JCIT, Range-3, Raipur Notification No. 1/2014-15, dated 15/11/2014. It is stated by the A.O. that the jurisdiction over the case of the assessee pursuant to the aforesaid restructuring was transferred to DCIT/ACIT-3(1), Raipur. Based on the aforesaid facts, it is stated by the A.O that since the case of the assessee was transferred from one Range to another pursuant to order u/s 120 of the Act, therefore, there was no need for the passing of an order u/s 127 of the Act. 13. At the very threshold, I am unable to comprehend on what basis the case of the assessee de-hors any order as per the mandate of Section 127 of the Act was initially transferred by the ITO, Ward-1(2), Raipur on 05/02/2014 to the DCIT, Circle-1(1), Raipur. At this stage, it would be relevant to observe that as per sub-section (3) of Section 127 of the Act, even in case there is a transfer of any case from any A.O or AOs (whether with or without concurrent jurisdiction) to any other A.O or AOs (whether with or without concurrent jurisdiction), the requirement of passing an order of transfer under the aforesaid statutory provision is ....